{"id":37910,"date":"2009-11-07T12:00:59","date_gmt":"2009-11-07T17:00:59","guid":{"rendered":"http:\/\/gigaom.com\/?p=78740"},"modified":"2009-11-07T12:00:59","modified_gmt":"2009-11-07T17:00:59","slug":"how-priceline-got-its-mojo-working-again","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/37910","title":{"rendered":"How Priceline Got Its Mojo Working Again"},"content":{"rendered":"
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\"priceline1\"Of all the dot-com superstars that appeared in the ’90s, shone brightly and then disappeared from sight, few have been granted a second act. One exception is Priceline, which 11 years after it was founded — and 10 years after its stock price collapsed — is quietly thriving. It\u2019s no superstar now, but it\u2019s an interesting case study of how an online company once written off for dead can in fact age gracefully.<\/p>\n

At its peak, Priceline\u2019s \u201cname-your-own-price<\/a>\u201d business model created a stir. Its founder, Jay Walker, trumpeted the idea as a revolution<\/a> that would upend the travel industry, and a lot of smart people bought it. George Soros and Paul Allen invested their money, and the stock surged to a $15.7 billion market cap, larger than most airlines. Forbes called Walker a \u201cmodern-day Edison,\u201d and Priceline expanded into new markets like gasoline and groceries.<\/p>\n

The revolution was over before it began<\/a>. Priceline\u2019s stock peaked nearly a year before the Nasdaq did, and it just kept falling: By the end of 2000, its market cap had shrunk by 99 percent to $220 million. Forbes regretted its praise<\/a> for Walker, admitting he \u201chasn’t lived up to our label,\u201d and Walker left the company soon after. Priceline backed out of the gasoline and grocery businesses, retreating to online travel, where it faced increasing competition from Expedia, Orbitz and others.<\/p>\n

But writing off Priceline as another failed dot-com also proved premature. Its approach wasn\u2019t revolutionary after all, but neither was it a bad idea. Somewhat ironically, it took another market crash for Priceline to begin to deliver on its promise. Its stock, which has risen 265 percent in the past year, has joined<\/a> the S&P 500 — the market\u2019s way of saying you\u2019ve finally arrived. Its capitalization is back above $7 billion, making it larger than Expedia.<\/p>\n

In the first six months of 2009, Priceline booked<\/a> $4.3 billion in travel services, an increase of 12 percent during a period when overall bookings declined by 8 percent. The company will update those numbers for the third quarter next week, and analysts are expecting bookings to grow by more than 25 percent, faster than many of Priceline\u2019s online rivals.<\/p>\n

What changed for Priceline? Its management avoided the hype about the revolutionary potential of naming your own price. William Shatner<\/a> and Leonard Nimoy<\/a> did refer to it in commercials, but Priceline waited patiently for the concept to take root — the way Amazon has been patient about free shipping, or Netflix has been about streaming movies online with no extra fee. The company has also expanded piecemeal, buying up smaller companies like Bookings.com when it could, and expanding abroad. It now offers travel in 78 countries.<\/p>\n

There\u2019s a lesson in Priceline\u2019s riches-to-rags-to-riches story for other Web companies. A lot of people watching tech companies — especially ones like me who write about them — get all antsy about their ability to deliver on their promise. This comes up when we talk about companies like Facebook not being public yet, or Twitter looking for revenue.<\/p>\n

But often, consumers move at a much slower rate. It can take years to grow comfortable with a new business model. There is a lot to be said about moving quickly in a fast-evolving industry. But there\u2019s just as much to be said about being patient with the people who are going to make you money.<\/p>\n

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Of all the dot-com superstars that appeared in the ’90s, shone brightly and then disappeared from sight, few have been granted a second act. One exception is Priceline, which 11 years after it was founded — and 10 years after its stock price collapsed — is quietly thriving. It\u2019s no superstar now, but it\u2019s an […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-37910","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/37910","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=37910"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/37910\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=37910"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=37910"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=37910"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}